tv Your Business MSNBC May 5, 2013 4:30am-5:01am PDT
two is better than one when small businesses hook up and co-brand. what the owners of this bookstore didn't know about their bookkeeper cost them dearly. and a seattle clothing store has a revolutionary high-tech way for customers to shop. small business owners, it's time to make money coming up next on "your business." ♪ small businesses are
revitalizing the economy and american express open is here to help. that's why we're proud to present "your business" on msnbc. hi, there, everyone. i'm j.j. ramberg, welcome to your business. the show dedicated to giving you tips and advice to help your small business grow. brand exposure is the phrase that so many of us use to talk about getting our names or products and services noticed by the public. while most of us go it alone, you don't have to. there's another option out there called co-branding. it's a chance for entrepreneurs to pair up and sell products together. >> three small businesses. >> we are a small batch roaster,
focuses on quality. >> with very different products. >> i work with the brew crew. we have there to produce all these beers. >> have a lot more in common than you might think. >> makes craft chocolate, so chocolate from bean to bar. >> they embraced the concept of co-branding. >> we're combining two brands together to help build a stronger presence. >> josh ferguson, the owner of k kaldi's coffee, he believes companies can create opportunities for each other. >> whoever you're co-branding with or what we're co-branding on, we want it to be successful. and we like to push it, talk about it, promote it in our stores. >> the company has collaborated on about half dozen products. one of the most prominent ones is beer. >> one day we decided to combine two products we both care a lot about, coffee and beer and created the coffee style beer. >> they've worked in part with
schafley. >> the first brew of the day should be coffee. the relationship we have kaldi's is the most significant and long lasting one we've had. >> the proof of the partnership is in the packaging. >> we wanted to make sure that it was very obvious that it was co-branded. >> both companies have made it very clear that kaldi's coffee plus a local beer equals a quality product. >> it does have some kaldi's elements. some of our swirls, mentions talks about kaldi'sen o the label itself. >> the relationship has been so successful that the seasonal brew consistently sells out. >> by customer demand, the popularity of the beer coffee stout landed it in the bottle. it was draft only for several years. >> we get people coming in all the time so excited to hear that schafly has brewed their next round of coffee stout. so that makes us excited too.
i think it helps, benefits both of us. >> the owner of patrick chocolate in columbia, missouri, became one of kaldi's partners after going to a coffee tasting. he suggested doing co-branding of their own. >> there's no reason why we shouldn't be working with a coffee company on collaborating. i thought what if i did a white chocolate and put coffee in it. and it was something like a cappuccino bar. >> the result was two chocolate bars, each made with kaldi's beans. >> they were interested and wanted to know what if we used our espresso 700 blend and how would it taste then? and that was the first bar. and we also began working on a mocha, which is a dark chocolate bar with their coffee in it. >> the arrangement with kaldi's is newer and different. the packaging incorporates elements of both companies. >> everything that we've ever collaborated with, it always has strong qualities presence, but a strong presence of what the other product is.
>> at their locations, the packaging says kaldi's and on the back, it mentions the chocolate. >> those same bars are also co-branded another way. >> when we sell them to our customers, we mention kaldi's on the back, but it's called mocha and cappuccino. >> in addition to the patrick mocha that sold exclusively at kaldi's locations, it's done wonders to up the profile. >> the power of someone else's brand when they have that great product, it makes it that much more sense. being able to get our chocolate into their stores, have their customers taste it and become repeat customers of our chocolate through them. there didn't seem to be a downside at all. >> the models are terelatively straightforward. >> the investment from both parties has never been a leading part of the discussion. it usually comes late in the game we both knew we were going to contribute.
>> here's how it works with the patri . those sales belong to patric, the money sold at the bar belongs to them because they pay for the labels. >> they wanted for their stores kaldi's specific packaging that looked like any other kaldi's product, which made sense to me. the bars we sell to them are less expensive wholesale because they've already paid for part of it, essentially. >> kaldi's sells their beans and there's also trade involved. for these companies, agreeing to co-brand was as simple as a handshake. but it's not always as easy as that. >> if you're going to get into a co-branding situation, make sure it's somebody you know, trust. >> i've had people contact me about co-branding where i think it would not be a good idea. >> getting the products launched took months of research and development. but these entrepreneurs say they believed in their partners and
the products right from the start. >> you have to be able to say, you know, even if we weren't working together, i would go and buy this product. >> the benefits and the pitfalls of co-branding are unique to each arrangement. but these entrepreneurs say co-branding is a risk worth taking. >> if co-branding doesn't work, if something continues to hurt, stop doing it. if it feels good, do it more. the co-branding absolutely can work for a lot of companies. and if you haven't tried it, give it a try. everybody's doing it. partnering with another small business to co-brand is a great marketing tool and it can work for all kinds of companies. let's turn to this week's board of directors. jen is a serial entrepreneur best known for starting her lifestyle brand empowered. and the founding partner of the ad agency with deep social media roots and you are both regulars on the show.
great to see you both. >> great to be here. >> thank you. >> you do a lot of co-branding or you have. and what struck me about the piece, what seems to be the most important line there is you have to know and trust your partner. >> right. >> because the bottom line is it is a partnership. and so both people have to be bringing something of equal equity to the table. you have to outline your expectations of what the contribution of both brands is going to be very clearly like they had suggested in the piece. and you have to make sure you're on the same pages in terms of growth and where it's going to go. like any partnership, if you're not constantly in communication of how the two brands are going to line, that's when problems start to come up. i love co-branding as a strategy because if you can bring two brands of equal value together, you tap into your audience instantly and can come up with a better product without having to start the resources from the ground up. >> well, and you sort of fall under the umbrella of the good will of this other brand, right? one and one can equal more than two. it's interesting, they could
have gotten coffee beans from everywhere. they didn't have to get branded chocolate or beer. how did you make the decision of okay, i want to get coffee beans or i wanted to use their name also. >> the keyword is branding. and that's how i have to look at things. in addition to reaching a lot of volumes of audiences, we want to make sure when we're risking that it's worth the reward so that the brand we're seeing has the same values, the same self-protection in place to make sure that the brand reputation doesn't go awry. everyone gets joint credit if things get good, but if something goes bad, you get joint blame. >> does it mostly come through conversations with someone? understanding you have the same values and they'll continue? >> well, i think that's where it has to begin. i think when you're creating the mission statement for this new co-branded item or service line that you want to be very clear. so what the mission is and always check back into the branding, everything they're doing to brand and put your brand out there to the world, whether it's media, advertising,
that it's in alignment with that brand and mission constantly. but it is always about the conversation. it is like the most simple form of business, but it has to come back to being open communication between the partnership. >> and if you were going to do this, would you put a short term limit the first time? >> uh yo can do a toe dip, something as simple as a social media joint branding thing where you say, okay, we're going to do a give away with your fans, you do one with your fans. you do have to clearly lay things out in the beginning so when it comes time to figuring out what you're going to do in the future, you're not mired together in something, just like in a business of partners, making sure you have that agreement in place. >> thank you so much. and we're going to switch gears now from the big brand picture to actually hr issues and how you keep your company running well. and this, unfortunately, is an issue that a lot of companies deal with. the gut wrenching problem of dealing with a dishonest employee. an issue relevant to businesses of all sizes, and if it hasn't
happened to you, chances are, you know someone whose company has been victimized by a deceitful employee. the results can be devastating. so listen carefully about signs to look for so you can avoid what happened to the owners of this alabama bookstore. >> at first, i think it was just -- it was total disbelief. >> she was a friend. i mean, her children played with my children. we hung out in the same circles. >> in the fall of 2008, karen and kiefer wilson faced the unthinkable. >> you've heard of identity theft, people getting taken advantage of, but you never think it's going to happen to you. >> the third generation bookstore located in the gulf coast community of fair hope, alabama, had been the victim of theft. and the most shocking part, it was one of their own employees that was stealing from the business. >> i mean, the desk wasn't organized, there was paper everywhere. how she could find anything was
amazing to me. but she made it difficult for us to find anything. >> a lot of times i would never see my bank statements. i'd ask for them and you'd get busy -- >> over the course of two years, theresa, the bookkeeper, had been stealing from the company in a variety of ways. from taking additional payroll checks to fraudulently using a signature stamp. most significantly, she was using payments intended for vendors to pay off her personal credit cards. she altered the entries in the accounting software to cover her tracks. meanwhile, the wilsons were working frantically to survive amidst a recession and pinpoint why their seemingly healthy business was struggling to meet ends meet. >> we thought it was the coffee shop, we thought we were ordering too much, we thought -- you know, we looked at every single department. we were dissecting everything we were doing. >> i was maxed out on everything. no lines of credit anymore. we were going under. >> within weeks, i told karen
that i thought the books were in criminal shape. >> lynn was hired as theresa's replacement in october 2008. after theresa left for a new job. >> i was absolutely stunned just at what i initially found and literally went for an hour looking at it and piddling with things and going, this can't be, this can't be what i think it is. she's been wiring money out. >> local authorities were contacted and ultimately the fbi took over the investigation. in january 2010, theresa was convicted of wire fraud. she was sentenced to 10 months in prison and ordered to pay more than $80,000 in restitution. >> we estimate she stole a little over $160,000. and when she left in october, literally because she was writing all these checks to her personal bills and not my vendors that were showing paid but they weren't paid. we were all on hold. >> the wilsons nearly had to declare bankruptcy, but they
persevered. the day-to-day running of the bookstore hasn't changed that much. but karen and lynn work closely on the finances. >> we can't give one person all the responsibility. we talk about, you know, who we're going to pay. i see a cash balance every day with her. i know exactly what we're paying that week. >> we spend more time looking at our bank statements. those bank statements come to our house as opposed to the business now. >> the advice i would give any small business owner is to monitor as much as possible, to be hands on with financial statements, with bank statements, with signing all checks, with being in contact with your vendors and knowing what you actually know. >> and while the wilsons look at this ordeal as the most difficult of learning experiences, they still believe they have to trust their staff. >> you just have to kind of persevere. we just feel like we've got to work harder than we ever have before. and you believe in good people.
there are good people out there willing to do good, honest work. when we come back, five things you need to do to make your company's web page stand out from the crowd. plus, what you need to know to help your brick and mortar store survive in an online world. we'll look at one seattle apparel store who found out how to do that by developing an app to help customers find items in their exact size. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this
with a prepaid card. spends like cash. feels like membership. brick and mortar stores lose a lot of business to online companies simply because some customers hate to go shopping. other people go online because it's just easier to order items in their exact size. so, a seattle store owner came up with a revolutionary system, an app to change that. here >> welcome. >> let's go shopping. >> a seattle store that claims to be changing the game by merging the in store experience with online convenience. >> it doesn't take away anything good about shopping, but it gets rid of nonsense. >> no piles of products, no mannequins and merchandise, this is it.
and here customers control the goods with their phones. using a special app, you scan the product code, the system asks you a size, the dressing room, and within 30 seconds the choices appear. the store was designed with male shoppers in mind. >> it was easy and i kept buying, i want to try those and try those. >> and you wouldn't have done that before? >> no. >> even those that think they're hard to fit. >> when i got these, i'm built kind of differently, so they didn't have -- they had my size -- >> differently than what? >> i got a little junk. >> but the concept has women coming in too. >> once people see what it is, this store will appeal to any person who wears clothes. >> for mother and hairdresser ivory anderson, the appeal is not just what she finds in the store, but what she does. >> crazy shopkeepers. >> trying to sell you things? >> right. >> or a 17-year-old with their first job who is a size zero who
doesn't understand, you know. >> in fact, in the privacy of your dressing room, you can try on as much as you'd like. >> i can't be sure, but i might need a belt. >> need a different size? use your phone to order more and drop any unwanted items down the return chute. the system updates on your phone. >> whereas in most stores they keep the inventory out in the store where you can see it, here, everything is hidden behind this wall. thousands of jeans packed into a microwarehouse along with a super secret delivery system that we're not even allowed to see. >> it is kind of our secret sauce. >> she says that top secret super fast system is what helps her keep costs down and customers happy. a few large retailers are now interested in buying it. but is this really the future of shopping? experts say maybe not for everyone. >> it won't work for huge chains, at least at first, because if you have to put this
technology into 900 stores, going to be a very spendy proposition. >> she invested $10 million to build her delivery system and launch this pilot store. three more stores will open soon. >> i love these. >> but for some shoppers, the proof is already in the product. >> when's the last time you found a pair of jeans you really loved? >> that long, huh? >> yeah. >> nbc news, seattle. it's time now to answer some of your business questions. jen and denise are still with us. like the story you just saw, you guys, this first question has to do with bricks and mortar versus the internet. >> we started as brick and mortar, and now we have a strong website also. but with all the online competition, how do brick and mortar stores still survive? >> it's interesting, right? people are really rethinking retail when it comes to bricks and mortar. any suggestions? >> well, it's funny, used to be competing against other people
all the time, not against yourself online. think of it as an additional way to reach people. and in the bricks and mortar shop, get something that's an offering that people can't get online. whether it's complementary, coming in and finding out whether these clothes fit you right or shoes or having a specialist there. and then they can go order them online. >> yeah, i mean, the retail stores themselves, bricks and mortar have to be more of an experience now, right? because you can get products anywhere. >> right. >> how do you think about making it an experience? >> they have to have some sort of brand equity they've come up with. and they come up with experiences that evolve that mission into the experience. if it's a gifting boutique, maybe the experience is that they have spa days or where people can come in and test the lotions and the makeup and really experience the products in there. you know, it's like books. i still love to read books. i know a lot of people only read them online. you know, i feel like a lot of people still need to touch and feel things before they buy
them. but it's an actual opportunity to really cross-promote using the social media and online experience to drive traffic into the store. >> okay, next up is a question about trademarking. >> i've trademarked lotus love beauty, the name of my company, but i'm wondering if it's important to trademark the names of our cents. >> what do you think, trademark everything? >> it can get costly, but if you believe your brand and company is going to explode to the level that most people want them to, you don't want to be rectifying that down the road. so while the investment can be large up front, i believe that if you believe that your brand is going to continue to grow and those name -- i mean, look at the company philosophy. the names of each one of their products very much are signatures to that brand. and if somebody came in and said no, you can't use this cake batter, then that would ruin a lot of their brand extension. so i think it's a valid investment for people. >> should you do it now or wait a bit? >> do it right away. property that's yours, you want
to protect it immediately. and that becomes a signature. if you look at all the s.e. nail polishes. no one else can use her ballet slippers because she did trademark that right away. if someone is wearing a scent from your company and they don't necessarily say the brand name, they're going to say what the scent itself is. you don't want people allowing someone else to also use it. >> the next one, a question about working with larger companies. >> as a small business, when is a good time and at what point do you begin to sell your product to a large buyer? >> good question, right? because it seems like a large buyer would be just a boon, but it comes with all kinds of headaches, too. you work with lots of large buyers. >> yes. it is a delicate balance as you're growing. the ego wants to say hey, i'm doing a big deal with a big retailer. but if you're truly not ready and you can't really take the overhead that happens from it staying in a warehouse or getting on the shelf to getting paid to getting the buybacks
that happen with big retailers, there's a huge financial responsibility that comes with that. so if you're not truly ready and funded properly, can you get into a lot of trouble. i think there's always a nice balance if you can continue to have a retail flow in a boutique or a niche space online and then as you begin to evolve, do a smaller test with big retailer. >> i was going to say, just do one for before you get a lot bigger. >> right. and from a brand protection standpoint, again, unless you're prepared to deliver your brand experience at a more mass level, don't endanger that brand experience you've worked so hard to create. it's suddenly going to be all over social media about how you didn't do that, and that is so damaging. >> right. okay. and then finally, our last question is about working with vendors. >> my company is a vendor-driven business. what's the best way going about finding new vendors to not only enhance our quality but also keep our costs low for our consumers? >> how do you find vendors? >> yeah, that's always a great
question because that is what fuels your ability to properly service your clients and create that experience. asking other vendors for a recommendation. i find it's really great to tap into those relationships of people that you trust who you've already entrusted with your brand to help them sort of, you know, filter it out there for you. and people love being asked to help. they really respond well to that. >> do you do tests with your vendors as well or do you just jump right in? >> i think you do test s with your vendors as well. i like to get to know them on a personal level before i jump into a relationship with them. i think in that environment to go to networking events and trade shows. and i know trade shows are becoming somewhat archaic, but it allows you to do mass relationship development where you can sit down and actually have coffee with somebody, have meetings with people and get to know them really well. social media has really helped step up that as well because you can see who your business partners are speaking to and have relationships already, and
you can reach out to them. >> great. thank you so much, denise and jen, for that advice. it was great. if any of you have a question for our experts, just go to the website. the address is openforum.com/yourbusiness. once you get there, there is a button that says "ask the show." hit that and you can submit a question for our panel. again, that website is openforum.com/yourbusiness. or if you'd rather, you can just send us an e-mail. firstname.lastname@example.org. we appreciate all your advice. we also go out to people who watch the show and people gathering together small business owners. now let's show you great ideas from other small business owners just like you. >> one of the best resources across the united states is score. it's s-c-o-r-e, the retired businesspeople that actually volunteer their time for people like you and me to go and just ask our questions and be guided. they're fantastic.
>> my great idea would be to look for apps that can help you with your small business. i was in the market for a scanner that could process my receipts and business cards since i had so much paperwork. and i was able to find an app that would actually save me the cost of a scanner and time and money to process all my paperwork for me. >> one tip i have is to use youtube, which is an incredible marketing platform. if you have the courage to get in front of a point-and-shoot camera, can you essentially market yourself and your company to millions of viewers. my company, dynomightly has had over 7 million views of our products and stores online. >> denise, you have done so many makeovers for us, and you always redo somebody's website when we have them. so we have five tips which could come from you, but we're going to move on here because this is about how your about us page can help you connect with customers in ways you may not realize.
so here are five tips that will make your page stand out courtesy of ink.com. one, tell your story. customers should be able to find out what your company does and who you are. be sure to detail how you got started and any notable achievements. two, let your personality shine. zappos and google are known for being fun and quirky so their page reflects that. make sure your business's original flair comes through. three, put up pictures. companies want to put a face on a company. include your executive or leadership board and their twitter handles. four, make it prominent. don't bury your about us page. put it in the top or near your navigational bar so your visitors don't have to search far. five, include relevant keywords. link keywords to specific product sections of your website. this will improve your visitors experience and help with search engine optimization as well.
do you want to make sure your team is on the same page but you don't want to micromanage them? check out our website of the week. idonethis.com is a simple tracking service. each day an e-mail reminder is sent out to your team. everyone responds with what was accomplished that day at work. the following morning, a digest that recaps the team's progress report is sent by e-mail and can be commented on by the entire staff. seems like an interesting idea. especially if you're not in the office every day. >> yeah, for sure. >> i love that idea. >> well, you guys, thank you to both of you so much for joining us today. i so love having you on the show and really appreciate all your advice. >> thanks. great to be here. >> thanks, j.j. and if any of you missed anything on the show today and want to see other segments, all you have to do is go to our website. it is openforum.com/yourbusiness. you'll find some web-exclusive content there as well. and we are on twitter, too. you can follow us there. @msnbcyourbiz.
and become a fan on facebook. the hispanic segment might be the fastest growing segment in the country. how can entrepreneurs connect with that community? >> the mistake that a lot of people make, they say, we're going to produce some spanish language ads and buy a bunch of expensive time on big-time spanish language station, and that's what we're doing. well, you know what? that's not going to get it done. >> we have some advice for you on targeting this demographic. till then, i'm j.j. ramberg, and remember, we make your business our business. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home...
as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership. good morning from new york. i'm steve kornacki. seven u.s. troops were killed saturday in two separate incidents in afghanistan. president barack obama this morning is on his way to ohio where he'll give his first commencement address of 2013 at ohio state university. we want to start today with the latest developments in syria this morning. israeli warplanes conducted an air strike inside syria early this morning. the second such strike in just about two days. a senior u.s. official tells nbc news that the target was a military research facility north of damascus. this follows an